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Axcelis Technologies Inc. Reports Operating Results (10-K)

February 29, 2012 | About:
10qk

10qk

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Axcelis Technologies Inc. (ACLS) filed Annual Report for the period ended 2011-12-31.

Axcelis Tech has a market cap of $181 million; its shares were traded at around $1.665 with a P/E ratio of 28.3 and P/S ratio of 0.6.

Highlight of Business Operations:

The sizable expense of building, upgrading or expanding a semiconductor fabrication facility is increasingly causing semiconductor companies to contract with foundries to manufacture their semiconductors. In addition, consolidation and partnering within the semiconductor manufacturing industry is increasing. We expect these trends to continue to reduce the number of our potential customers. This growing concentration of Axcelis' customers may increase pricing pressure as higher percentages of our total revenue are tied to the buying decisions of a particular customer or a small number of customers. Axcelis' net revenue from its ten largest customers accounted for 68.6% of total revenue for the year ended December 31, 2011 compared to, 62.7%, and 56.6% of revenue for the years ended December 31, 2010 and 2009, respectively.

The Company's product revenue includes sales of spare parts and product upgrades as well as complete systems. We refer to the business of selling spare parts and product upgrades, combined with the sale of maintenance labor and service contracts and service hours, as the "aftermarket" business. Included in total revenue of $319.4 million in 2011 is revenue from our aftermarket business of $147.6 million, compared to $142.2 million for 2010. Aftermarket revenue generally increases with expansion of the installed base of systems but can fluctuate from period to period based on capacity utilization at customers' manufacturing facilities which affects the sale of spare parts and demand for equipment service.

Gross profit from service revenue was 27.0% for the twelve months ended December 31, 2011, compared to 34.3% for the twelve months ended December 31, 2010. The decrease in gross profit is attributable to changes in the mix of service contracts and the unfavorable absorption of fixed service costs.

The Company's product revenue includes sales of spare parts and product upgrades as well as complete systems. We refer to the business of selling spare parts and product upgrades, combined with the sale of maintenance labor and service contracts and service hours, as the "aftermarket" business. Included in total revenue of $275.2 million in 2010 is revenue from our aftermarket business of $142.2 million, compared to $98.2 million for 2009. Aftermarket revenue generally increases with expansion of the installed base of systems but can fluctuate from period to period based on capacity utilization at customers' manufacturing facilities which affects the sale of spare parts and demand for equipment service.

Gross profit from product revenue was 30.8% for the twelve months ended December 31, 2010, compared to 14.7% for the twelve months ended December 31, 2009. Approximately 3.3% of the 16.1% increase resulted from a lower provision for excess inventory. The remaining 12.8% increase in gross profit from product revenue is attributable to higher systems sales volume and the related favorable absorption of fixed overhead costs which increased gross margins by 22.3%, offset by a 9.5% decrease in gross margin resulting from an unfavorable mix of parts and upgrade revenue.

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